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The government has unveiled its Digital Strategy document, which sketches out how heavily used public services will be made 'digital by default'. The shift could eventually save £1.7bn a year, the government hopes.

The DfE said on Thursday that schools will save £10m over three years after it signed a Memorandum of Understanding (MoU) with Microsoft.

The deal will run across the UK from January 1 until the end of 2015 and will allow schools to buy Microsoft's academic software at a discounted price and provide more flexible licences.

"Schools will now have the option to license software by headcount rather than by device, which is a greater freedom for them," a DfE spokeswoman told ZDNet. "It also allows them the alternative to use other products without being penalised under their licence. For example, some schools might choose to use OpenOffice rather than Microsoft Office. Before it was all or nothing."

The DfE says schools are under no financial or contractual obligation with Microsoft to buy its software.

The deal, brokered with the help of the Government Procurement Service (GPS), builds on an existing arrangement that the DfE has held with Microsoft since 2004.

The public sector has been trying to negotiate better deals with software companies in other departments in recent months.